Real estate can be one of the best ways to hedge against inflation, but buying and selling property, houses, businesses or other real-world real estate is impractical for many smaller investors.
Fortunately, there are plenty of real estate sector stocks and real estate investment trusts (REITs) that investors can buy to make buying real estate quick, easy and cheap. Many of these real estate stocks also pay sizable dividend yields, especially REITs, which must legally distribute 90% of income to investors.
Here are five of the best real estate stocks to buy today, according to Bank of America.
Prologis Inc PLD
Prologis is a logistics real estate REIT that owns more than 3,000 buildings in 19 countries and focuses on high-barrier markets.
Analyst James Feldman says global warehouse demand remains elevated, and Prologis is well-positioned to raise leasing spread, same-store net operating income (NOI) and funds from operations (FFO) guidance throughout 2022. In the most recent quarter, Feldman says Prologis reported solid core metrics, including 75.8% tenant retention and a quarter-end occupancy rate of 97.7%. Prologis pays a 1.9% dividend.
Bank of America has a Buy rating and $180 price target for PLD stock.
American Tower Corp AMT
America Tower operates the world's largest independent portfolio of wireless communications and broadcast towers.
Analyst David Barden says towers are inherently stable businesses and are a critical part of the global wireless communications business. American Tower grows revenue by both expanding its network and raising contractual prices for customers. Barden says wireless subscriber growth, subscriber usage growth, data usage growth and new spectrum development are all long-term tailwinds for American Tower, which also pays a 2.3% dividend.
Bank of America has a Buy rating and $315 price target for AMT stock.
Crown Castle International Corp CCI
Crown Castle International owns and operates wireless communications towers and broadcast transmission networks.
The company recently raised its 2022 EBITDA guidance by $250 million after closing a new long-term deal with T-Mobile Us Inc TMUS. Barden says Crown Castle will benefit from the same tailwinds that should support American Tower's business in the long-term. He's projecting 44.2% EPS growth in 2022 and another 11.7% growth in 2023. Crown Castle also pays a 3.3% dividend.
Bank of America has a Buy rating and $224 price target for CCI stock.
Equinix Inc EQIX
Equinix is a specialty REIT that is the largest global data center operator.
Barden says hedges will help Equinix navigate rising European energy prices in 2022, and the company ended 2021 with its best bookings performance ever, which was led by its America's operations and digital services portfolio momentum. Barden says Equinix is undervalued given the strong, visible demand growth in network neutral colocation, a market in which Equinix is uniquely positioned. Equinix also pays a 1.7% dividend.
Bank of America has a Buy rating and $865 price target for EQIX stock.
Public Storage PSA
Public Service is a REIT that is the largest owner of self-service storage facilities in the U.S.
Analyst Jeffrey Spector says high year-end 2021 occupancy rates positioned Public Storage well heading into peak 2022 leasing season. In addition, storage demand drivers, including job mobility, home renovations, a hot housing market, remote work and a strong consumer, remain intact in 2022. He says Public Storage is one of his top stock picks in a bullish storage REIT market, and the stock also pays a 2.1% dividend.
Bank of America has a Buy rating and $444 price target for PSA stock.
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